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The research reports excerpted here were issued recently by investment and research firms. Many may be obtained through Thomson Reuters at thomson.com/financial or by calling 800-638-8241. Some are available in the company-research area of WSJ.com, or through Factiva.com. Some of the reports' issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

AppleAAPL 1.783803068141277%Apple Inc.U.S.: NasdaqUSD114.12
21.783803068141277%
/Date(1481302501923-0600)/
Volume (Delayed 15m)
:
11387798
P/E Ratio
13.84340991535671Market Cap
597858946891.729
Dividend Yield
1.9915272743154124% Rev. per Employee
1846780More quote details and news »AAPLinYour ValueYour ChangeShort position
• AAPL-Nasdaq Outperform • Price $665.24 on Sept. 4 by Credit Suisse We are reiterating our Outperform rating and declaring a target price of $750. Our detailed analysis of the smartphone market shows that Apple and Samsung are collectively growing the high end of the market, rather than gaining at each other's expense. We continue to believe that Apple's integrated-platform advantage—with its ability to address computers, tablets, and phones simultaneously—along with its carrier-led distribution growth, mean that the company should deliver 30% EPS growth, based on a calendar 2013 P/E of 11 times and net cash of $124 per share.

The smartphone market is growing to unprecedented levels. Initially driven by Apple and now furthered by Samsung, the global high-end smartphone market ($400-plus retail price) is growing to a range of 275 million to 332 million units in 2012/2013, from 188 million units last year. We see Apple having a 47% share and Samsung having a 40% share, and therefore pressuring spending available for other vendors such as Nokia, HTC, and RIM. We also believe that growth at this price point comes at the expense of other consumer electronics categories, as the high-end smartphone market accounts for the greatest wallet share within the broad consumer electronics industry.

We are lowering our 2012 and 2013 comprehensive EPS estimates to 93 cents and $1.32, from 95 cents and $1.33. Our price target remains $16 and is based on our sum-of-the-parts analysis, which values the broker using a 13 times multiple of our 2013 segment earnings estimate and values the market maker at 100% of estimated tangible book value for the segment. We reiterate our Buy rating.

Our $13 price target is one times tangible book value per share, nine times 2013 (pro forma) EPS, six times '13 EV/Ebitda (enterprise value over earnings before interest, taxes, depreciation, and amortization), and two times '13 EV/Sales. Our sum-of-the-parts analysis also suggests a stock valuation in the $13-to-$14 per-share range. The primary reason for using the low end of historical valuation multiple ranges is the margin pressure in the display segment, which has historically accounted for more than three-quarters of the company's profits.

Gannett stock still remains our single best long-side equity idea. We are maintaining our Outperform rating and raising our price target 2.3%, to $21.50 per share (prior target was $21 in our June 23 launch report), and upside potential is 41% to our increased price target.

We are maintaining our Sell ratings on the senior unsecured notes, given our view of a likely superior risk-adjusted total return in the common stock, where the current dividend yield of 5.2% materially exceeds the yield in all of Gannett's unsecured notes.